tv Bloomberg Daybreak Europe Bloomberg September 24, 2018 1:00am-2:30am EDT
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nejra: good morning from bloomberg's european headquarters. manus: this is "bloomberg daybreak: europe." nejra: one hour into new tariffs, neither side blinks as beijing calls off trade talks. markets in china, korea, and taiwan are closed. manus: two of the world's biggest lawyer -- oil traders expecting to $100 a barrel by 2019. nejra: comcast muscles outfox first guy. what will fox do with its stake?
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-- muscles out fox for sky. what will fox do with its stake? manus: the calls are getting louder. let's get more on that meeting of opec and its allies. annmarie hordern is on the ground. >> good morning. we could see once oil opened, it opened 1.4% higher, trading under $80 a barrel and not even , theurs after the meeting ministers met here in algeria, saying theytraders could see oil spiked to $100 a barrel by 2019. this is as tensions from iran hit in november. opec stopped short of giving exactly details on how much they would supply to the market.
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they say they will reach demand and do whatever it takes. signaling there is enough oil in the market right now. it will be interesting to see what happens when donald trump wakes up this morning and washington, d.c.. much. thank you so you can see the reaction in oil today. let's get to the risk radar. i have brent. we are seeing wti above $71 a barrel, hitting a two month high, reacting to what happened yesterday. the hang seng down 1.3%. the only thing we are focused on today is the button pressing in terms of the $200 billion of tariffs on chinese goods. china going to retaliate. talks are off. a number of the equity markets in asia closed, including china and japan. i wanted to put the dollar up the good that has been
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interesting in the sense it has been weaker despite the fact the 10 year treasury yield has been moving higher. treasuries not trading right now. we are seeing the dollar in recession. is it about being the safe haven? we are seeing the aussie and the new zealand dollar underperform. we -- gooddanger is to be in the same space as you. the danger is we have too good of a time. this is one month volatility and three-month volatility. the pound heading levels we have not seen since the financial crisis -- sorry, since the brexit referendum. you are seeing volatility ratcheting higher. the question is whether sterling is now fully priced for the political risk between theresa may and the labour party conference, who are now going --ind
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you're going to see a drawdown in sterling. the referendum may come back to play in the labour party conference. on a no deal scenario you could see cable dropped to a book 20. it takes the head of pimco to say we are overpricing. the risk is too high for a no brexit deal. nejra: we're going to talk more on brexit. u.s. futures pointing lower after u.s. stock closed flat on friday. we are going to be talking about whether the america first trade is over. let's get the bloomberg first word news with juliette saly. the u.s.-china trade war has entered a new phase as the latest round of tariffs came into effect. in a significant escalation, $200 billion of chinese products
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are subject to increased levies. $60 billion of goods from the u.s. will become subject to chinese tariffs. on saturday, beijing called off trade talks amid the escalation. oil prices are higher today after donald trump's demand that opec take rapid action to reduce oil prices got a tepid response. the group said it would boost output only if customers requested it. in contrast to the dramatic u-turns policies tweets provoked earlier this year, saudi arabia and their allies stopped short of promising specific extra volumes of crude. >> we can bring an additional 1 million and a half barrels. we have repeatedly said that. we have brought 100 million starting in june. that is subject to demand. juliette: brett kavanaugh's
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nomination to the supreme court is at risk after new sexual misconduct allegations emerged. the new yorker magazine reported that senate democrats are investigating an incident that took place during his college years at yale. that comes as the senate judiciary committee prepares to hear testimony from a woman claiming he assaulted her in high school. allegation in the white house issued a statement saying it stands firmly behind his nomination. the u.k. opposition labor party is raising the pressure on theesa may, proposing option of a national vote on brexit. the motion will be put to delegates this week with german court and saying he will accept whatever the conference decides -- with jeremy corbyn saying he will accept whatever the conference decides. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries.
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you can find more stories on the bloomberg at top . it would be good if we could get sections -- we want to focus on the ones trading today. china is out of action. hong kong is under pressure. you are seeing asian stocks lower for the first time in five sessions. the hang seng index adding to those losses we saw heading into the lunch break. we have been watching the movement in the fx space. the australian dollar and the kiwi have come under pressure. let's have a look at the stocks we have been watching in the region. you have seen weakness coming through in development stocks in hong kong in response to the weakness across hong kong. also we saw the one-month interbank rate jumping the most since 2008. that is adjusting we could see rates move in tandem with the fed. also consumer stocks coming under pressure.
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in new zealand, a2 milk is falling the most in months after the ceo sold her stake. asian stocks as a whole in the red for the first time in five sessions. we eagerly await china reopening. manus: let's wait until liquidity comes back. the latest on the markets. let's get to our top story. beijing called off talks with u.s. officials. tariffs on an additional $200 billion of chinese goods to the fact. our senior international editor in hong kong is jodi schneider. the tariffs are live. are there any indications the two sides may resume talks before any retaliation? >> it does not seem likely at all. it seems at this point the u.s. and china have made their decision they are sticking by the tariffs and the retaliatory
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tariffs and that they will put off talks until a later date. president trump has made the any short-termt pain from the tariffs is work it -- is worth it for his long-term goal of taking actions against china to get it, open up its markets and reduced that trade deficit with china. all indications are that there won't be any talk anytime soon. we are well under 50 days until the u.s. midterm elections. themes playing into the tariffs and president trump's political reasoning at this point? >> they seem like they are playing -- like they are a big factor in his calculations. there might be talk after the midterm. he really is trying to play to his base. ,he republican political base in talking tough and acting tough on china.
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in midterm election years, the goal is turnout. he wants to motivate that republican base to get out and vote. the democrats are trying to do the same thing. top action and talk on china is very much geared toward that. he campaigns on this has now he is delivering this to say -- a few days before those crucial midterm elections. manus: thank you very much. jodi schneider, our senior international editor. our guest host to the chief investment officer at st. james place wealth management. $200 billion worth of new tariffs. well signaled. are we preparing ourselves for the long haul of, i suppose, disagreements on trade? >> we absolutely are. there has been a lot of talk. now we are into the action point. the midterms are going to be
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important, but the longer-term implications are going to be important. if you are in the chinese position, you are interested in what happens in the midterms. if the democrats come out on top, they might get long-term talks. that may be why they pulled out of the stocks over the weekend. nejra: does it look like significant talks might not take place until after the midterms? >> i think that is quite possible. there was a lot of posturing at this stage. trump needs to appear to be strong and therefore does not want to see it what the chinese are pointing out. he wants to get back in. there may be a standup on the midterms. manus: for markets, we have this in gtv. nejra was rolling over for her sunday morning sleep, i was presenting for markets.
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the u.s. is still storming ahead. are you worried about global growth? >> we have to be. divergence,to see the synchronization in the chronization in the global growth story. >> people are starting to talk about convergence in terms of the economics of price indexes. we have a chart to show that. also in terms of equity markets. re: getting to a point now where the u.s. economy could get hit and u.s. equity markets could get hit? >> if you look at the performance of global stock markets, the u.s. index has done well. the rest of the major economies have not. day,ly, at the end of the
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if the u.s. economy does start turning over, that will have an impact on the rest of the world's economy because of the amount of consumption that comes out of the u.s.. manus: the one thing we looked at this morning was emerging markets. emerging markets actually had a bump last week. what we saw was local and foreign currency bonds turn higher. have weto have gone -- gone through the eye of the storm? is the catharsis on its way? we fully priced in to more hikes? that is what jpmorgan are saying. despite the tariffs, it could embolden the president to make geopolitical mistakes. >> i think we have two rate rises nailed in.
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if people are turning their attention to 2019, how many rate rises we would be likely to see -- but coming back to your question, we are in a position where there is relief amongst the emerging-market. i do not believe we are out of the woods. there are still potential problems along the way, particularly if that causes weakness and emerging-market currencies. nejra: what is your base case? do we get to 2019 and we have carrots on all chinese goods 25%? or du see 10% on all goods? 267 not beingt imposed? >> it depends on where we are post-midterms. if trump does better and comes out strongly, he is going to feel emboldened to really follow through. one would imagine he could easily raise tariffs to 25%. manus: wilbur ross said it is the consumer.
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samsonite are saying we're going to have to raise our wholesale prices. yuan is 6% overvalued. we prevaricate everyday over whether they're going to weaponize the yuan. it is overvalued, they have a host of triggers they can use. what is next for the chinese in terms of bolstering the tariffs story? >> it seems the chinese government is not using the yuan as a weapon at this stage. nejra: they said they are not as well. >> they are using other methods to bolster specific companies in the economy by providing specific grants into parts of industry to make sure they are not weakened to a point where there is a structural weakness. that is . is what the chinese government
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starting in june. the rest is subject to demand. >> a lot of countries have spoken about their potential capacity. nobody has stated exact figures. you cannot say the exact figure. we will continue monitoring and giving the market what it needs. that is why discussions have been held. saudi arabia has said their numbers, i have just told you rush's capacity. exact numbers depend on what the markets call for. --the threat of sanctions but we continue our effort to secure our situation. now has morehouse to say on price movement than -- arguably maybe because of the tweets and the
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thaty and the issues directly or indirectly touched the oil market. i think what's going on in the white house has more to do with the recent increase to near $80 brent. i call a washington premium. >> those are the highlights of our interviews from the meeting of opec in the algerian capital. opec sidestepped president trump's demands for oil prices. saying it would only boost production if demand increases. we have seen the market impact of yesterday's decision already. >> that is right. >> brent opened higher, trading just under $80 a barrel. we have already heard from top oil traders saying that they
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could see brent spiked to $100 a barrel by 2019. iranian sanctions hit and they see tightness in the market. $80 ats are saying while barrel for the fourth quarter is priced in, they could see $90 or $100 if geopolitical tensions actually materialize. amongst all of this, opec said they're willing to boost supply, but only when demand is needed. they did not give specific numbers. all these journalists hounding the ministers, what is the price, and there was no specific number. the technical committee met and found they are over complying by 29%. the group is over complying and all they are saying is they are going to meet demand when there is customers, but they are not giving specific numbers on how much actual oil they will be putting into the market. manus: the other thing mercurius
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says, when i ran jumps out -- drops out, they see demand jumping. that is more than people were speculating in vienna. in terms of making up for ability,audi has that but not in isolation. they will need others to make up 2 million barrels, won't that? >> that is right. bob mcnally saying saudi has capacity, but how much? if they use all of it, they will be seriously stretched. we know russia is pumping at post-soviet record levels. the uae, kuwait has capacity. again, this is going to be what many say is a tight market. the other thing we have to remember is it is not just iran. , mexico, libya
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is producing more, but there is always potential risk. iran is a big one. we are seeing potential losses from other members as well. nejra: thank you so much to annmarie hordern. the chief investment officer at st. james's place wealth management is still with us. 2019 we see $100 oil and if trade wars escalate? window demand is part of the discussion yesterday. >> in a perfect storm we could see $100 oil. that would be if we got to iran,tion declines from the result of the sanctions, problems in libya and nigeria, if we had atlantic storm sitting the gulf of mexico, of course we could see that. that is unlikely because that is not going to play well into the united states environment. that will be contrary to what trump is saying.
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even if the saudi arabia and start opec are not listening so closely to trump, i think they're going to pay some attention rather than close attention. manus: many people would say the oil market is priced in such a way it can do with ironic, -- with iran, but anything else that topples over -- i think this is going to be a global central bank issue. continues.entum this is the ultimate headache on top of everything else for federal banks. >> this is a real problem. this feeds into central-bank discussions about raising interest rates if you are sitting in the federal reserve and you see the oil price going up, that leaves you with no choice but to follow through on policy to contain the inflation rate going higher. the other point we have not talked about, what about demand? if you are in the united states
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looking at close on three dollars a gallon for gasoline, does that mean demand starts tipping over and the number of miles driven starts declining? that is going to have an impact on the demand side. >> one of the ministers said to anne-marie that trump matters more to the oil market than opec. does he? >> trump has a worldwide impact. the comment that was made is there is a washington premium, which i think is interesting. what they are saying is the u.s. has been more influential in setting oil prices than it has been for many years. manus: the price of oil in those states of the republican is important when it comes to the midterm. stay with us, we have more to get through. show, all buthe
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♪ kong,e shots of hong there's the harbor. when it comes to talking, the chinese news agency says they can't have been on the u.s. terror threat. jpmorgan says we should get ready for round three. china says talks can't happen in the current state of play. china says the door is always open for talks, if they can send a delegation to have the talks. that probablyay is smart. >> that is one of the big
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and we are definitely seeing the risk off play in the markets, and the number of markets have closed in asia and you are being it reflects through the fx space, and we had a good two weeks in e.m. but not today. it was nice to find it. thate is weaponize inc. according to sources. sebastian salek -- good to see you. >> hello. trade is front and center as we kick off with those terrorists. markets close from china to japan, south korea, expect lower trading, a third of what we see on a typical trading day. that is playing out across the hang seng, weakness in malaysian stocks, the indian rupiah and the south korean won feeling the brunt.
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you have brent crude up, wti crude at the highest level since july. opec falls short of the pledged to boost production. many are seeing a return to a $100 oil which we haven't seen since 2014. ,hey have got a long way to run so we are a little bit short of those predictions at the moment. let's take you back to that em story. i have one story in local currency in white and one in dollars in turquoise. the pictures are dropping today but this latest trend is something of an uptick, so they have been weathering the storm on the trade talks despite seeing a little bit of weakness. we also have to talk about the dollar. it is more or less flat today
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and what's interesting is these next long positions really rallying over the course of the second half of the year but in the last few weeks they have been dropping we hit historic levels. we are seeing them come off and there's better sentiment. >> thank you, sebastian. let's get the first word news with juliette saly in singapore. >> in the u.s., brett kavanaugh's nomination to the supreme court is at risk after new sexual misconduct allegations emerge. "the new yorker" has reported that senate democrats are investigating an incident that allegedly took place during his college years at yale. that comes just as the senate judiciary committee prepares to hear testimony from a woman claiming he assaulted her in high school. he denied the allegations and the white house issued a statement saying it stands firmly behind the nominee. the u.k. opposition labor party is raising the pressure on prime minister theresa may, proposing
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the option of the national vote on brexit. it will be put to delegates at the annual meeting this week with leader jeremy corbyn saying he will accept whatever the conference decides. she has repeatedly dismissed the idea of a second referendum. hasa's prime minister launched the world's biggest health insurance scheme. he promised free coverage for half a billion of the poorest citizens ahead of national elections in may. the bottom 40% will be covered under the shift, he handed ,edical cards out at the launch calling it a historic day for india. tiger woods won his first pga tournament in more than five years, the former number one captured the championship at the eastlake off club in atlanta, his 80th victory taking him within two records.
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it marks the long-awaited turnaround for the 42-year-old after scandals and injuries cost him lucrative sponsorships. global news, 24 hours a day and at @tictoc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> juliette saly, thank you. let's take a look at what you should be watching this week. france unveils its 2019 budget in paris and the president leaves donald trump in new york. we also have a trade delegation going to the u.s., and tomorrow the u.s. leader addresses the un's general assembly for the second time. on wednesday the fed is expected to raise rates and release updated projections. we will get to those. >> it's all about -- it depends on which bank you read. we see turkey's presidents begin a visit to germany where he will
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meet angela merkel just outside paris. fed, and thethe reserve is set to announce its latest policy decision on wednesday. the market expects a rate hike. ,he latest quarterly review they are warning that central banks are overburdened and unprepared for the next downturn. the chief investment officer at in termsty tough lines of what central banks are up against. conference this news is going to be the last independent moment before trump turns on the fed. would you agree? >> i would find that quite extraordinary. i find it hard to believe that the fed will not be
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allowed to retain independence, that has been an important point of the way in which the government and the central bank has operated in the united states as long as we can remember. trump to be really impacting the federal reserve would seem to be more interventionist, and most people in the business would want to not see that. >> we get the projections for 2021 this week and what we saw at the end of last week had curve steepening, ended the week at 25 basis points. are we going to see the curve flattening to? the market has started to catch up in recent weeks. >> what's fascinating is it is the danger of over extrapolation. will rise in 20 and they may not stop in 2020.
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a lot of decent commentators are saying where the u.s. economy is likely to turn over at the end of 2019, talking about a recession. thes hard to imagine interface continuing to increase into 2020. watching or reading what the fed is saying in 2021 will be interesting. 1980'ss not since the that there was a differential between germany and the u.s. >> i was alive. [laughter] >> and i was learning what the yield curve was. let's get the ramifications of a differential of yield. this, is theis dollar now hitting its peak? it has had that yields bid but is it running out of steam? this is an unrewarding premium for the dollar and this is the dollar beginning to diverge.
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is>> the dollar weakness more short-term and it will come towards the end of the year. the yield differential is still too substantial and is likely to increase further for >> does that give the dollar mortals? >> i think it probably does. we were talking about this earlier on. if you see further dollar because the yield differential between the united states and other global markets continues to increase -- other central banks are not able to i finde interest rates, it hard to imagine that the dollar won't strengthen. >> the thing is, a lot of people are pointing to that 10 year yield, and yet dollar weakness. some are saying that this is the market starting to really wake up to concerns, structural concerns, about the u.s. economy. i'm guessing you are not in that camp.
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think what we have to see -- we could see yield inflation at the beginning of 2019, i think that's a possibility. see is what we have to what state the u.s. economy is in as we go into 2019, and whether suddenly the u.s. rate rising cycle has got to change so we don't get these rate increases. >> ok. thank you so much. the chief investment officer at st. james's voice wealth management. an interview you do not want to miss is today, the argentinian president. he joins the team for an exclusive interview at 2:30 u.k. time. >> coming up, europe's budget wins, but will the mission to make work pay prove popular? this is bloomberg. ♪
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♪ >> it is 6:44 a.m. in london, 1:44 a.m. in the morning in a sparkling new york. the s&p 500 cap to record-breaking week with a whimper, ending flat on friday, but still had a weekly gain, u.s. futures going lower today. we have the imposition of that $200 billion of tariffs. we have the blue ash let's get the bloomberg business flash with juliette saly in singapore. marigold is said to be an advance negotiations to merge operations with the african focused rival randgold resources. bloomberg has learned a deal is eminent. they are in colorado springs for the four of, representatives for both companies declined to comment.
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the trump administration is considering an executive order for the president that would instruct federal antitrust in one force agencies to open probes into google, facebook, and other social media companies. theite house officials said draft is in its early stages and hasn't been run past others. documentlters says the is it the result of an official white house policymaking process. has signaled it wants to bring investment in from south korean companies to modernize the secluded country, according to one of the business chiefs that went to pyongyang last week. in an exclusive interview, the chairman of cgi group says the head of the korea employee federation says pyongyang wants economic cooperation and technical assistance. korea has the largest
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addressable market opportunity and also they need it. >> and that's your bloomberg business flash. >> thank you very much. race, landing a knockout $39 billion blowup inocencio has the details of this special. >> that knockout bid from comcast was 7% higher than the offer from fox. 28, in was 17 pounds this it is being seen as an effort by comcast to end the war once it for all. for brian roberts, this might be particularly satisfying. it comes after a string of setbacks including his own
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attempt to buy it before he was outbid by disney. after clinching the deal he said "this is a great day for comcast." now roberts is on the cusp of laying claim to a tv and digital empire that has a footprint across half the globe from the western u.s. to western europe in germany. this would double the cable giants number of tv subscribers. sky has 23 million customers across europe, which means comcast would have about 52 million people in total. the deal would also help comcast hedge its bets better to compete with netflix in the digital space. this is an expensive that, and investors have been skeptical so far. comcast shares have fallen 5% year to date, while sky investors are probably really happy. since therallied 57% start of the year.
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to seal the deal, brian roberts will be looking to why it on the market. he needs to get more than 50% by october 11 and he already has independent directors recommending the company accept the offer. also, there aren't any regulatory hurdles to handle. all of those were cleared back in june. ramy inocencio, bloomberg news, new york. >> we will speak to another who joins usve, for an exclusive interview at 3:30 u.k. time. now let's get into trending and what's going on in the bloomberg universe. back, thes is 42-year-old golf icon won his first tournament in more than five years. and from tictoc to
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bloomberg.com, with the uk's opposition closer to endorsing a se second brexit referendum. jeremy corbyn says he would prefer a general referendum but will be bound by the decision tomorrow. >> or would it be a fudge? that is the question. inon the most read stories, third place -- we are talking about opec, attended response to the oil and jpmorgan has senior market risk from overconfidence on the u.s. tariffs. today,t more now for >> emmanuel macron's second budget as french president will be unveiled, but with growth slowing in the government promising more tax cuts to businesses and workers, room to maneuver is limited. joining us now, are paris
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correspondent, carillion conan. caroline, what's in the bag for the french 2019 budget, given not only the slowing growth of rims, but the fact that emmanuel macron's popularity has been declining? >> that's correct. macron's popularity has been down dramatically over the summer, but he is sticking to his budget goals. he doesn't have much choice if he wants to keep that 2% deficit target set up by the eu at a time when growth is slowing to 1.7% this year and could be even slower next year. budget, thethe priority is to keep businesses , that could cost as much as 20 billion euros.
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macron wants to abolish employee contributions and overtime. any state money he wants to cap the rise of benefits to 0.3%, not below the inflation, expected to be at 1.4%. he wants to cut as many as 4500 public sector jobs for next year. that's not really going to help his popularity, it has slipped about 10 points already over the summer. he is being dubbed the president of the rich. if you look at the latest poll over the weekend, 29% of the french are satisfied. >> well, obviously, he has quite an agenda, and that's not going down well in the polls. caroline, the italian budget is also being presented later this week. how can france and italy keep eu deficit target and reforms?
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heard is very confusing. on one side, you have a few -- they are happy to let the deficit goal of 2% from next year, if it is needed, to include the well-being of the italians. they want to introduce a a sick universal in -- a basic universal income, a measure of the five-star movement. they also want to lower the retirement age and it just taxes. but that is not going to go very well with investors, if you compare the debt to gdp ratio of italy versus other countries in europe. it is only second to greece, 130% of gdp. france is keeping it below 100%
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the economy mr. last week saying they will try to keep the five-star movement ambitions under control. >> caroline connan, are paris correspondent, thank you for talking us through it. chief investment officer at the james's place wealth management is still with us. i want to ask you about italy. what in the budget could not just make yields move lower, but make them stay lower? i ask this because a number of investors they even if a project a deficit within that limit, what they will be coming through is to see if it is supported by underlying growth assumptions. pimco, aberdeen standard staying short or underweight, socgen recommending a selloff after this month's rally. what would it take to have those yields move lower? >> i think the only thing could
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be is if there weren't any of these policies, and that seems so unlikely considering the two sides of the argument. if you have a five-star move meant and the league saying they want ubi and to lower the retirement age, you are not going to be able to have one without the other. it seems really unlikely that yields will go and stay low. i think possibly you will see if the other way around. what's interesting is that if you compare italy to greece, greece has been preparing it self where italy hasn't. >> many are saying that the italian situation, a lot of this political noise, this is the relationship between equity, the euro -- you can see it is very much in sync.
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euro area currencies have the highest correlation in two years. we have had that for 26 of 27 weeks. with that kind of correlation coefficient, given what you said about the dollar, is it time for money to come back into europe, given where we are politically? >> it goes back to the pmi numbers we were looking at, which are turning down in europe. i think that makes it hard. stronger,conomy is which is why dollar weakness seems slightly odd. are investors going to be attracted to europe when it looks like the economic data is getting worse? that feels unlikely. >> the american first trade for you continues in terms of equities? >> it seems to, up to a point. but there has to come a time where one says, well, the divergence of performance from
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u.s. stocks relative to the rest of the world, that divergent has to start narrowing. it has been very low through 2018 than previous years. there has to come a time where that divergence will start narrowing. >> and the u.s. falls or other economies catch up? >> i'm sure it will be a bit of both. >> thank you to the chief investment officer at st. james's place wealth management. we will continue the conversation on bloomberg radio at 7:30 a.m. u.k. time. >> $200 billion worth of tariffs. this is the market impact. there are a lot of asian markets on vacation for the rest of the week. you also have aussie dollar down .4%, new zealand dollar also lower. >> the dollar slightly higher, e.m. coming under pressure after to struggle weeks or emerging markets. we will carry on the
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♪ good morning. >> this is "bloomberg daybreak: europe and these are the tops tories. >> neither side blinks as beijing calls off trade talks with washington. s&p futures are called lower, markets are closed. >> opec defies the call for more world'snd two of the biggest oil traders see it spiking by 2019. we have an exclusive interview with alexander novak. fox news valued at $39 billion. what will it do with its stake in the european broadcast?
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tariffs are live. its goodsound has knocked out with tariffs from the united states of america, which downgrades the global outlook and down she goes. bit more focused and the german market versus the u.k. market and paris. jpmorgan says get ready for phase three of the growing potential risk for markets. but thelightly better, hedge funds have their view on copper. play, comcastd in and sky, they dug deep into that billion, futures are
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lower, the risk in these markets is that we have a little bit of a shakedown in terms of tariffs. >> i will get to that, we have breaking news here. ,vx recommended the merger basically we have news over the weekend saying this might happen so now it is looking like barrick is recommending the merger. we will bring you more as soon as we haven't. let me talk about the market, it was a pretty good week, not just for u.s. markets but for emerging markets and asia. risk office coming back today. we are also seeing u.s. futures point lower, bearing the brunt of the risk off sentiment in asia because china and japan and taiwan and of korea are closed. south korea, we are seeing wti
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barrel,above $71 per the highest in two months for oil after opec and its allies signaled to let them boost their output and stop short of promising extra volumes. they said they would do it when customers wanted it. the dollar has been the safe haven are a lot of escalations, it is big today, up 2/10 of a percent. we are also seeing the aussie dollar in new zealand dollar underperforming. if you go back to the story that we had just the other day, it's about the symbiotic relationship between barrick and randgold. eric may benefit from the experience in africa and to that extent, this is where you begin to see and others and the possibility of this deal going through in terms of the actual
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prices that are being quoted. finishes $63.91 at the close of business on friday. the top line on the news is the , barrick agreed to buy randgold 46.180 billion, so this is going to be -- it is going to be a paper deal, it is going to be in shares versus cash and we will see whether the breakdown has more but i think moment it looks as if it is a paper deal with the price tag of 6.128 in terms of the payment. >> in many ways the strategies are similar, this is the reporting we got yesterday when we were thinking this might happen, both firms focused on production cost aiming to build portfolios that generate cash flow even as gold prices drop as low as $1000 stop you also have
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high hurdle rates for investment, eric has to have the internal rate of return of 20%. both are also headed by outspoken leaders with strong visions. bristow is a very regular guest with us. he talks about efficiencies in the cash within the company. we last time and i was here, pushed it, in terms of dividends and all the price of gold but yes, very outspoken leaders the question is what are the synergies? when it comes to the bond market, it is instantaneous. we are little lower in terms of pricing, the question for the bond market is where are we in terms of yield curve play? will we go further flat with a turn on friday. futures are a little lower,
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bones are up, will they or won't they play by the rules of the eu? they are going for a budget which will be revolutionary and evolving. one lady who was never worked is juliette saly with your first word news. the u.s. china trade war has entered a new ways since the latest round of tariffs. in a significant escalation another $200 billion in chinese products are subject to increase levies. on saturday, beijing called off talks with washington and said that they can't happen under this threat of tariffs by the u.s.. higher todaye after donald trump demanded opec take rapid action to reduce oil pricing giving a tepid response over the weekend, saying it
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would boost output only if customers requested it. outrageast to the earlier, saudi arabia and russia ignored the urgency and stopped short of promising extra volume. >> we can bring in additional million and a half. over half aght million starting in june. the rest is subject to demand. >> in the u.s., brett kavanaugh's nomination to the supreme court is at risk after new sexual misconduct allegations. "the new yorker" reported senate democrats are incident -- are investigating an incident that took place during his college years, that comes as the senate judiciary committee prepares to give testimony from a woman claiming he assaulted her in high school. he denied the allegation in the white house issued a statement saying it stands the hind the
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nomination. partyk. opposition labor is raising the pressure on the prime minister, proposing the option of the national vote on brexit. emotionally put to delegates at the annual meeting this week with the leader saying he will accept whatever the conference decides. may has repeatedly dismissed the idea of a second referendum on the single market. global news, 24 hours a day and at @tictoc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . normally we check the world map of there's not much to check today because so many asian markets are out of action. mentioning, you are seeing hong kong bear the brunt of the weakness, seen as a barometer to these latest tariffs. the hang seng is extending drops in the afternoon and the
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australian market closed fairly flat with renewed weakness coming through in the em markets. jakarta is off by 1%. we also heard -- let's switch over -- hong kong is going to raise the one-month grade, jumping the most since 2008. we are watching the hong kong dollar which had that big spike on friday. today you are seeing just a little more strength coming from from the u.s. dollar. the aussie dollar is very much , selling off by 4/10 of 1%. all eyes on what china will do in the markets reopened. futures are suggesting a selloff many manufacturers were stressed even before the tariffs came in and jpmorgan says they are looking at phase three between the u.s. and china. >> juliette saly in singapore, thank you. we showed you the bond futures
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and talk to you through them but plenty of treasury yields, pretty much unchanged in this session. treasury trading getting underway as japanese markets have enclosed. let's talk trade. u.s. tariffs on $200 billion of chinese goods kicked off and china has responded that talks can only happen in an environment of interest to act. for more let's go to our senior international editor in hong kong, jodi schneider. update us on the latest. that china'sest is official news agency came out and said it will not participate in any talks with the u.s. with the rate of more tariffs. this is not only -- not only will they not participate in talks at had been offered by the treasury secretary but they are saying that they will only
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participate when the u.s. is no longer threatening tariffs and vice president trump threatened another $267 billion on chinese imports in the future if they do not take steps to open up their market more to the u.s. and tried to narrow the trade gap. it looks like this is deepening, no talks insight and president trump is basically saying that in his view any short-term damage to the economy would be worth it to change things in the future with china trade. he doesn't seem to be backing off his threats for future tariffs. we will see what happens, no talks scheduled anytime soon, unlikely until after the midterms in november. >> thank you so much to our senior international editor in hong kong. joining us now, our chief economist at investec. great to have you with us. paul donovan said we are not in
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a trade war until we start to see meaningful changes to actual trade from countries to global trade. are we in a trade war? >> i think we are. >> he's going to be very upset. [laughter] latest,u look at the they are something like 50% of chinese imports into the u.s. and that begins to be a material figure. are being imposed at a time when the u.s. economy has a considerable degree of as thementum and position of tariffs doesn't have a massive effect on growth prospects but nonetheless we already have a pretty large proportion of imports around which tariffs are being levied. the direction of travel is more rather than less and i think it is right to call it a trade war. >> we have $200 billion worth of
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additional tariffs, the chinese new agency coming up with a little more. exporters are being treated unfairly in the u.s. dumping probes, china says, that u.s. -- we are going to see an awful lot of this rhetoric and the back-and-forth. for markets,mean what does it mean for transport? a big shout out to our charts editor in asia. right fromight shanghai told rotterdam, and you , a ratchetingy higher shanghai l.a., shanghai rotterdam going in the opposite direction. ofs is the manifestation
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actually shipping goods around the world. throughout the trade war's, does it cost? >> it sounds, and you hope that's the sort of message which president trump is getting from the more sensible members of his administration, saying we understand what you are doing, you are trying to squeeze the chinese into making concessions this ishis escalates bad for the world economy and bad for the u.s. economy and your voters. gohow far does this have to for it to have an impact on the fed in the sense that it stops tightening? is it the imposition of all chinese goods? where do you draw the line when you start to a, the fed could cause the tightening here? >> it is difficult to be scientific about it, but we are getting to a point where the
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u.s. economy is growing strongly, the labor market is tightening, you're beginning to see underlying wage and price pressures. what we know is that this is not ,he point where the fed stops and it is not the stage where the fed begins to reappraise it , saying we are still likely to tighten in the economy still has more upward momentum. obviously if we see more tariffs being imposed, that could change exporters outlooks. it also changes the domestic trust, don't forget that. this is something which the fed might want to look at from the other side of the equation and make it -- but for the time being it is not the most significant factor. >> so they continue on a -- deutsche bank, a
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number of others, you want to see it rolling over into 2020 and 2021. if they are going to avoid the recession probability. would you agree with that, that is going to be important? >> i think they are important for short-term market sentiment. >> for people like you and me, but to the real people, no? >> for the likes of economists trying to make rate calls and look at what financial markets are focusing on. however, i think the reality is that they don't really know exactly how many rate hikes will be necessary, what the economic outlook is through 2019, 2021. they are really only a guide for current thinking. so yes, they are quite useful, but we have to look at other indicators, economic indicators, to try to gauge what the outlook
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is for the economy and where the fed is likely to stop. >> i want to ask about the u.k., because we have quite a lot of boe speakers, an unusually high amount in one week, which could give us some sense of where it goes from here. with all the news flow we've had over the weekend, the impact of the pound from theresa may's televised speech, any shift in your expectations for how the boe's reaction function is going to work in terms of what happens to brexit? >> no, in short. our view on brexit is that there will be a lot of noise, and also that there will be points where you think westminster and the eu will never speak to each other again. >> tim: says we are overpriced ring hard brexit in areas, it depends who you read. you have pimco and others saying we will drop -- are we overpricing hard brexit? is it game theory?
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>> i think we are still on hard brexit. is that some deal will be done and the pound will rise, however, the two important stages, the u.k. has to strike a deal -- and this is becoming more common knowledge, the government has to get the vote for parliament, and that could prove as difficult. let's take aw, quick check on the markets. futures,xx 50, tenure $200 billion of additional tariffs go live, jpmorgan is factoring into with strategy the growth potential for phase three. year yield is slipping back but we are still looking at 2018 highs. are you going to go parabolic?
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>> [laughter] i actually want to go parabolic on the 10 year yield because inmate we got to 313 but we are still holding above 3% which is quite surprising. five times this year we went above and pulled back, u.s. futures pointing lower, copper that 10 year yield is up one basis point. >> you heard it here. never mind parabolic stocks. they're a change. >> he said we don't talk about it enough. we are talking about the tenure yields. let's turn to commodities, prices higher after the demand that opec take rapid action to reduce oil prices got a tepid response, saying they would boost output only if requested.
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we spoke to the russian oil minister about his country's output capacity. >> [speaking russian] how september ends because the month is still not over. if we are looking at august outers, we have recovered of what we have cut and we are still within the cut level. with the june decision we have always been within october levels. but i would like to once again underscore the fact that this is within the agreement that were made in june, 2018. i'd like to remind you that in june we decided to increase ,utput i one million barrels and so far we have only managed that is why we recommended 100% conformity.
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>> how much extra oil production came into the market at the end of the year? >> short-term potential, a couple hundred thousand barrels, and when we talk about long-term , the stimuli will be ready to give, which are currently being discussed, but no decisions have been made. this will determine the upside potential, and we have quite a complex tax system. the government is reviewing a number of proposals which have made by our ministry, which would, if accepted, stimulate measures for reserve groups and if accepted we would be reviewing all plans. >> which russian company would pick up the extra output? >> oil companies which participated in the voluntary cuts have significant output growth potential and i can tell you that all the russian majors
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which currently exist can increase outputs. >> alexander novak, geeking exclusively to henry wharton. let's bring you some of the stocks to watch. it will be randgold, on the deal with their, which has been agreed. they will own 66% of the combined company. it is our executive editor for commodities and energy -- gold goes up, i wonder what he says. give us a call. the industry needs consolidation. this potentially make sense. >> it does. 50 years ago, you had a ton of oil and 10 grams of gold and these days it's about one gram. you have to dig up the statue of liberty's worth of gold to get two teaspoons -- that doesn't
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make a lot of sense. if you think about the cost involved, the bigger you get, the better. >> these strategies are quite similar's elliott accents. >> it does, and there's a geographic issue here. it is obviously outside north america as well. in some respects they do you risk, sort of, may increase their abilities to get costs arrow where it is getting harder to find. >> thank you so much to stuart wallace, a quick update on this. now to sky and comcast, which got a bidding war victory. it is on the pricey and to a prolonged bidding war for europe's largest satellite broadcaster. seal.bring in thomas
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we have put our judgment saying it is pricey but it is one of the questions people are asking -- did comcast pay too much? >> it exceeded the estimates of m&a analyst and those we spoke to before the weekend, and comcast shares have slid year to date. it will be interesting to see what they do in the u.s. open, it was certainly way above what fox was willing to pay. >> a lot of people will say what did comcast get for this? it isory that i read -- technology and content, and there's a lovely title on our --ry this morning which was "paying up and looking large, or is it just folly to pay this much to go head-to-head?" which do you reckon? >> people pay a lot more than need to make that decision, but they are paying for a lot of subscribers, nearly doubling
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their base. the ceo spoke about it very highly, and it is going to completely change the shape of the company, 25% european revenue company. >> that's a radical shift. >> and it will be interesting to see what they do. >> it will also be interesting to see what happens to the 39% stake in sky. >> we might see what happens with that today. they could hold out. you could end up with a situation where you have them as minority ownership and comcast as majority. >> we have a little more detail on this -- we saw comcast take a stock knock. they are talking about the financing on the increase, and this is where the market will focus. they added a revolving commitment to finance and it will be interesting to see what it means in terms of the shape and structure. and this is really where the
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market is worried about the possibility of taking on additional debt to finance the ,eal, the victorious ego trade that's the debate. >> absolutely, and you are right to bring ego in, they lost a couple battles and it will be interesting to see what shares do. >> thank you so much to thomas seal, and remember bloomberg users can interact with these charts, browsing recent charts featured on bloomberg tv. you can catch up on key analysis and save charts for future reference as well. >> i will ask them to keep a benchmark of whether they keep more of your charts or mine. let's have a look at some of the commodities. deal, this doing a is what we are looking at, copper coming lower. .8%, iron oreby
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anna: good morning. welcome to bloomberg markets. "the european open." i'm anna edwards alongside matt miller in munich. saw asian stocks trade lower. those that were open, many of the asian markets were closed. generally it looks like asset classes, the pricing we see, shrugging off concerns about donald trump's trade war with china. cash trade less than 30 minutes away. ♪
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